US auto sales to individual customers in July surpassed analysts’ expectations, a sign that sales will continue to increase this year.
Retail sales helped GM and Ford increase their share prices, but overall sales have been under expectations. According to analysts, the drop in fleet sales to businesses and governments has been higher than predicted and Wall Street’s expectations had been too optimistic.
“The industry appears to be tightly supplied, which is just good for pricing and future production and so that’s helping to offset the headline (annual sales rate) disappointment,” Morgan Stanley analyst Adam Jonas said.
US auto sales in July increased 14% surpassing 1.3 million units, according to Autodata. The annual sales rate in July reached 15.67 million units, under the predicted 15.8 million units. In the following months Ford said it will boost production for its Fusion midsize sedan, which saw sales fall 12% in July.
Pickup truck sales continued to increase, with Chrysler’s Ram truck up 31%, GM’s trucks up 44% and Ford’s F-Series up 22.6%. Auto sales in the US are expected to continue to increase as automakers will introduce the new 2014 lineup, with technological improvements.
“People who are looking to buy a car are thinking, ‘This changeover is more substantial than we typically get. I want to wait,'” Jonas said. “It bodes very well for the second half.”